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Companies Bill [Lords]

I have, of course, spoken with Baroness Noakes and she is pretty comfortable with her initial comments. The Minister did take some time to run through the Government’s rationale for this offence, stating that, in her opinion,"““Good auditors who behave honestly have nothing to fear””.—[Official Report, Standing Committee D, 13 July 2006; c. 725.]" But even having said that, when I asked about the issue of auditors occasionally making mistakes—given that they are human—and following up anomalies, she said: ““If he””—the auditor—"““was in any doubt, the safest thing would be to check things through””.—[Official Report, Standing Committee D, 13 July 2006; c. 724.]" Surely that is the heart of the problem. That is why audit costs will rise if this offence is passed today. The Minister said so in Committee. Will she agree to assess the impact of this aspect of the Bill once we are, perhaps, two years into its operation, and will she agree to revisit the offence if it proves to lead to unnecessary and disproportionate rises in audits costs for businesses? Moreover, to return to the intervention that was made by the hon. Member for Great Grimsby (Mr. Mitchell), given that audits are carried out by teams of people, ranging from the audit junior to the assistant manager, the manager, the director, and the partner, in practice it could prove difficult to establish which team member committed the offence. I presume that we could have a situation in which several auditors on a team would be prosecuted simultaneously because it was not clear where exactly in the team the ““knowingly and recklessly”” behaviour associated with the offence took place. In Committee, I expressed my doubts and said that that might be a fatal flaw. Before that is brushed off by the Minister, I refer again to the corporate manslaughter legislation, which had a fatal flaw and ultimately proved entirely ineffective in the courts because of that flaw, to the extent that the House—I think today—has had to set up another Committee to look at a fresh version of that legislation. Perhaps the Minister can comment on how she expects that it would be assessed which audit team member should be prosecuted. Does she expect that multiple prosecutions of team members might arise?